High noon

July 23rd, 2011

The Spectator

The American left is revelling in Rupert Murdoch’s British troubles – and it’s America that has the power to really hurt him.

Let’s start, first, with the bare facts: a British newspaper has been found to have broken British law. The proprietor has closed the paper and apologised profusely. Some British policemen have resigned. Some British journalists have been arrested.

While all of this is happening, wars are being fought in Libya, Iraq and Afghanistan. The baseball season is progressing. Goldman Sachs has reported a disappointing $1 billion profit. The US Congress is wrangling over the national debt and, as a result, the American government may be about to default. And yet the story we all want to talk about here in Washington this week is the story of the British paper breaking British law. About Rupert Murdoch giving evidence to a House of Commons committee. And, of course, about Wendi Murdoch and her astonishing right hook.

How to explain it? The News International meltdown has been on the front pages of America’s most prestigious newspapers every day since it began. It has led the evening news, dominated the blogs, come up on every chat show and in many private conversations. I went to see a friend about the prospects for Egyptian democracy, and he wound up quizzing me closely about the prospects of a Murdoch resignation. Another friend keeps me up to date with gossip about the high-powered Washington law firms (there are several) that Murdoch has consulted to prepare his potential defence.

This interest is not idle: it is political. In the suburbs of Washington and on the island of Manhattan there are many, many people who blame Murdoch for the rightward shift of the American media, for tabloidising television, for lowering the tone of public debate, for bringing a British note of viciousness into a once-civilised public debate. As I’ve written before, Murdoch’s Fox News channel plays much the same role in America that the Sun plays in the UK: it is louder, brasher, sometimes less accurate, often more entertaining and definitely more right-wing than its traditional rivals.

Indeed, Fox News has gone further than the Sun. Its commentators pushed the ‘Obama wasn’t born American’ and ‘Obama is a Muslim’ stories as long as they could; its editors hired Sarah Palin. Until recently, it also employed the notorious Glenn Beck, who used his television time to denounce the President as a socialist, a Marxist and a fascist, sometimes all at once and sometimes on alternate days. Fox News is often held responsible for the growth of the Tea Party movement, the polarisation of Congress and thus the debt negotiation that we are ignoring to talk about Murdoch.

But if the liberal establishment’s interest in News International is largely political, it is also deeply personal. To a degree unusual even in the narcissistic worlds of American politics and media, Murdoch has sought not just to compete with his opponents, but to name, attack and destroy them. When he took over the Wall Street Journal in 2007, he told a meeting of its executives and its editors that he wanted to ‘really cripple the New York Times’. Last year, he started offering heavy discounts to advertisers to lure them from the NYT. Both Murdoch and Robert Thomson, who came from London to run the Journal, have attacked Arthur Sulzberger, the NYT’s publisher, by name, in print.

If New York Times journalists believe themselves to be locked in an existential battle with Murdoch, in other words, that may be because Murdoch repeatedly told them so. And if the Democratic political establishment believes him to be a mortal threat, that might be because News Corp gave a million dollars to the Republican party just before last year’s mid-term elections. Murdoch has never seemed to mind acquiring enemies. Now he has plenty.

As in all the best tragedies, hubris has now been followed by nemesis — and by a predictable thirst for revenge. Not by accident did the New York Times reinvestigate the hacking story last year, or seek out a former News of the World staffer who could testify that it was more widespread than many believe. It still has multiple journalists assigned to the story. Not by accident have Congressional Democrats called for an investigation of Murdoch’s possible violation of American laws against bribing foreign officials. As the Wall Street Journal itself editorialised, ‘the Schadenfreude is so thick you can’t cut it with a chainsaw’.

And News Corp is vulnerable, in America, in ways that News International in Britain is not. For one, it is an American company and, even after a rally this week, its stock is suffering: a shareholder revolt may be on the way. One group of shareholders has already sued the company for its purchase of a television company owned by Elisabeth Murdoch, and has been seeking to block her appointment to the board of directors. It has now tacked more charges onto its suit, declaring that it wants to ‘put an end to Rupert Murdoch’s use of company assets to serve personal and family agendas’. This group and its lawyers may also be politically motivated — they have trade union links — but that only gives them more incentive to join the mob. A Bloomberg news analysis now suggests that News Corp would be worth 50 per cent more if the Murdoch family resigned from its board. How long before others on Wall Street start calling for him to resign as well?

Even if Rupert were to resign, the family’s American problems might not be over. There are signs that some of his children have become uncomfortable with Fox News as it has swung away from the centre-right, where it began, and into nuttier regions. Last year Matthew Freud, husband of Elisabeth Murdoch, declared himself ‘ashamed’ of the channel’s top manager, Roger Ailes, and ‘by no means alone within the family or the company’ in being so. News Corp immediately issued a press release distancing the company and Rupert Murdoch from those sentiments. Elisabeth Murdoch wrote an apology to Ailes. But the suspicion remains that she was not privately so very sorry. She is known to have supported Obama’s campaign, and even held a fundraiser for him in 2008. If that was sincere support, and not merely a cynical attempt to keep the family in the good graces of the White House (not impossible, given the family) then she can’t be very happy about some of Fox’s more wild-eyed contributions to the American political debate.

So would Rupert’s resignation lead to a Murdoch family battle? It might. Could the Murdoch family then lose control of News Corp altogether? Not impossible.

Right now, only public ignorance protects Murdoch from the fury of his enemies. Here is the greatest difference between Murdoch’s position in Britain and his place in America: his name doesn’t have much resonance. Fox viewers largely don’t know or care that their favourite channel is owned by an Australian-born mogul who also runs newspapers in Britain.

In the coming days, Murdoch’s many American enemies will do their best to make him more famous. The US Justice Department and the FBI are investigating claims that News of the World journalists hacked phones of 9/11 victims. The New York Times and congressional Democrats appear to be focused on this same story. They know the impact that the Milly Dowler story had in Britain, and they are betting that a similar scoop could touch off a similar reaction in the US. I am reliably informed that Ed Miliband’s team has been in touch with some of its friends in the Democratic party to discuss tactics on these matters. I would not be surprised to learn that the New York Times is in touch with the Guardian on these matters as well.

If any sliver of the 9/11 story is true, all bets are off. Imagine the weeping widows, the angry mothers, the protestors outside News Corp office, the angry letters. Imagine the politicians who will rush to the television studios. The photographs alone could force Republican politicians to denounce the foreign-born mogul who has quietly bought up so much of the American media market, and who has, they will note, received so little American scrutiny. This may be a British story. But there many powerful people who are dead keen to Americanise it.